It is all obvious or trivial except…

Ritchie on France\’s 75% tax rate

Those who will be subject to this rate of taxation are rent-seekers. No one can ‘earn’ that much otherwise. Addressing that rent-seeking behaviour is vital if society is to survive. In that case progressive tax on the rewards from rent-seeking is vital. It’s as simple as that. The imbalances that rent-seeking is creating, in wealth, in income, in opportunity in hope: all those inequalities will crush society. There is no choice but address these issues, now.

Hmm. That\’s interesting, isn\’t it?

If you earn over €1 million a year you must, by definition, be rent seeking.

I don\’t doubt at all that some who earn that sort of money are successful in seeking and collecting economic rents. I do rather doubt that all are: Daniel Craig for example. We might say that yes, OK, he\’s gaining a rent through controlling the world\’s supply of Daniel Craig. Even through copyright on movies.

Although that\’s not quite what we usually mean about people \”rent seeking\” really.

Imagine, say, that The Courageous State became a best seller. Sells a couple of million copies as people realise that this really is the blueprint for the desired society. Ritchie would therefore earn well over a million in the year that happened (yes, I do know what his contract looks like, I\’ve seen the standard one from the same publisher). Would we then say that Ritchie was rent seeking successfully?

I think it would be a simple matter to create a Richiebollocks generator and then we could do away with the real thing. Automation is the future after all, or maybe it’s the past, something like that anyway.

I’d argue most if not all people in skilled jobs have a portion of their salary attributable to rent. In that in (even) tougher times or with more people doing what we do, we’d take less money to keep the roof over our heads and food on the table. A similar thing even applies to unskilled jobs where unions use collective power to demand greater than market wages for their members. It’s not a bad thing in that it is essentially redistributive, and as most places have progressive taxation, the rent component is more heavily taxed than the labour component anyway.

I’ll leave the speculation on the desirability of controlling the world supply of Daniel Craig to Mrs V and extend the overpaid investment banker trope instead. There’s no doubt in a competitive market you’d get cheaper investment bankers. They might be overpaid in terms of market rates, but in at least the long term, if they get overpaid relative to productivity (of which a lot is, admittedly, as with most skilled professionals myself included, what they can screw out of customers rather than the real value they add) the employer will eventually run out of money anyway. So even rents to some extent self-correct.

It’s true that some (though by no means all) of Depardieu’s, Rowling’s, and Craig’s income derives from rent. I can’t speak for Dyson.

So, yes, they are rent-seekers, and recent changes in copyright law seek to extend their ability to extract rents. So I’m not sure why you say that “it’s not what we usually mean about people rent-seeking”.

You may say it’s not, but as it’s pantomime season, all together now – “Oh yes it is!”

Murphy appears to be using the term so loosely that it discredits a useful term. As he usually does.

Now, if he wants to attack state-granted privileges and regulations that boost incomes of one group at the expense of others, well that’s great. And as we know, even ardent classical liberals have done this over things like statutory intellectual property rights.

However, rents are not, ipso facto, wrong. Murthy might as well say that landlords are evil or that those who get an income from creation and invention are evil.

One thing we can be sure of: the New Year will not see any more sense from this character. But keep putting the boot in, Timmy!